Deductions Posts in Tax Q&A


Income tax on drop-shipping



I am currently doing drop-shipping, the products which come from over sea, so I would like to know what income tax would I need to pay. What do I need to know about this if I am doing it for the first time? Could you kindly share tax material with me which I can use to also work my way through this.

Individual Tax Consultation



In January 2018 I stopped working as a full time employee and for the 2018/2019 tax year I did various things (including foreign travel and work) and earned different kinds of incomes. I did not register as a provisional taxpayer as at that stage I really did not know how the year was going to pan out and if I was going back into full time employment again. I would like to settle any tax I may owe for the 2018/2019 year, however with my different incomes, working out the country for more than 18...

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Shareholder Loan and own company



I have a loan with my company (payable from the company). I would like to know what the effects are that we need to consider regarding interest-free loans? I am aware that we can create a tax deduction for the company and I will have the interest exemption, but I feel there is something I'm missing?

Also if the shareholder already exceeded his R23k exemption, will it be fine if we do not levy any interest on this loan? Will there be any unknown tax consequences for that?

Is VAT on commission subjected to income tax?



If an an individual who is a registered as VAT vendor acts as an Agent and earns commission ad obviously charges output tax and declare it to SARS.

I.e. Someone who has invoiced out R100.00 and declared an output tax of R13.04 to SARS, when the time comes to file their personal income tax does the person have to declare the same amount being R86.96 excluding VAT as their commission income and do they have to pay income tax on the above amount?

Will that not be double taxa...

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When can I submit my tax return?



When can I submit my tax return for the 2020 tax season? Are the filing dates still the same as those of the previous year?

Tax deductions exceeds the tax paid



What happens if my Allowable Tax Deductions exceeds the tax paid in the same year. Logically I should only be able to claim back the actual tax paid? It will be Additional allowable Medical claims which will not be covered by the medical aid. These amounts plus smaller deductions will push the claims to over and above the tax payable amount.

How to check available funds at SARS



If you have never filed for a tax return before, how do you go about checking if there are funds owed to you at SARS? I would like to start filing my tax return for this year as I have been unemployed for a long period, but now I am back in the workforce.

Learning disablity claimable from SARS



I pay for a scriber to assist my daughter that has a learning disability, I would like to know whether I will be able to claim this expense from SARS. I did not register my daughter with SARS or SASSA. So, I do not know what process to follow regarding this matter would be.

Contract worker and Tax



I was retrenched at the end of 2017. My last Tax Return was done in the year 2018. Since April 2019 I have been receiving income for work done on a contract basis and the company indicated that I need to see to my own tax affairs. How do I go about filing my tax return for 2020? Your assistance is highly appreciated.

Drop-shipping and taxes



I am currently running a drop-shipping business on Shopify which makes around R83 000 in sales (that's about R45000 profit) per year. As it is a small amount of money at this moment, do I still need to register my business at this stage and start paying taxes? Also, I am ordering small products from China and sending them to customers all around the world. I am not sure how i should go about the taxes in this case. Could you assist me with that?

IRP5s and companies paying RA for employees



If a company is paying into a Retirement Annuity (RA) for employees when preparing an IRP5, using source code 3828 as income, would we then need to use source code 4006 for the same amount? In other words, source code 3828 for the amount paid by company on behalf of employee (this amount will be added to the income total) and code 4475 for the same amount. If an employee has not contributed anything code 4006 will be 0, but will still have to appear on the IRP5?

Foreign Employment and Tax Implications



I am a South African resident currently employed full time. I earn a monthly salary of R23000 (before tax). I have recently started consulting part time for a foreign company that will pay me in dollars. On average $2000 every 3 months.

Provisional Tax and Rental Income



I have filed and completed the 2017 personal income tax for myself. I started receiving rental income from my property in March 2017. Where do I declare this income? Is it part of provisional tax and will I pay penalties for late submission?

Also,
1. The property is owned by myself and my wife. Will we both need to file tax returns for this Rental Income?
2. Does this mean a whole new tax return must be submitted, or is it only necessary to complete the IRP6?

Provisional Tax and Annuity Income



At the start of the 2021 tax year I will be earning a monthly income from my living annuity [LA], however as I understand from the provider of the LA, that tax will be deducted by them before I receive the monthly amount. I am registered as a provisional taxpayer and will be earning additional income on top of the LA income. So, I therefore assume that I can continue being a provisional taxpayer and declare the additional income only in the IRP6, or would I have to declare both incomes and then ...

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New company and tax forms



I have a new consulting firm and I completed an IRP6 twice, for the two SARS documents, as provisional tax. Note that on the said form there is no provision for any deductions of expenses to set-up my company.
I am not sure what to do next.

Do I need to complete a ITR12 form?. If so, where can I get this form? Currently, it does not show on my SARS e-filing, only the two completed IRP6 form are indicated.

Declaring the cost of building a rental property



I had rental income in the 2019 tax year, I converted part of my house into a 1 bedroom apartment as well as converting my old garage into another, so I currently have 2 flats now on the property. The apartments represent around 34% of the squares of the buildings on the property. Should I then declare 30% of the costs of the property (I.e.: Interest, Rates & Taxes etc as the costs) as the costs?

Also, where do I declare the cost I had incurred in building the units? (Does it come und...

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Structuring tax for a side businesses



I need some advice regarding how to structure my taxes and what ways I will be able to reduce my tax exposure through deductions, registering as a private Pty vs Sole proprietorship etc... I have a salaried job and am starting up a side business working from home as a web developer. I am also considering to start renting out our flatlet via Airbnb. The total income I am looking at includes (per month): 1) Salary: R70000 2) Airbnb: R3000 (which is a bit hard to estimate right now till we have built a track record, but this is assuming an average occupancy of 13%) 3) Web development: R5000...

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Foreign income with online forex trading



How one would declare Income/Loss that is derived from online forex trading. The trading account is in USD so I assume foreign income.

1. Where would one declare this income/loss with TaxTim/eFiling tax return under foreign income?
2. Is it necessary to declare if only a loss was made?
3. Can withdrawal fees/currency exchange and bank fees be deducted from overall profit.
4. What documentation would SARS require? The only documentation that can be acquired from the trading platform is trading history showing profit/loss but no tax certificates. ...

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Independent Contractor versus Personal Service Company



I'd like to get some clarity on whether there is a difference between an Independent Contractor and a Personal Service Company?

Tax on shares



I received a once-off payment for shares in November 2018. I then opted to pay tax on the shares before the payments was made to me. Therefore the tax was already deducted before any monies were paid to me. I am now uncertain how to enter this in my 2019 tax return. Can you please advise %u2013 do I need to submit this income in my 2019 tax return and if I must, what figures must I submit in terms of the share payment made to me in this tax year?

Claiming retirement



I am confused and I need some clarity regarding money I am contributing into a pension fund. I am making monthly contributions into someone else%u2019s pension fund. I was wondering whether I can deduct my contributions from my income for tax purposes. Can I claim these contributions back? I am not certain whether this is doable and would appreciate your help.

Earnings of a teacher and tax



I would like to find out if I should submit a tax return as a teacher that earns R300 000 per annum. Would this be required of me?

Tax allocation



Where does my tax money go to?

Tax Deduction for education




How to work with multiple streams of income




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